Mirant plan-excluded debtors request approval of $20 million DIP

By Caroline Salls

Pittsburgh, Dec. 22 - Mirant Corp. plan-excluded debtors Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc. and Hudson Valley Gas Corp. (New York) requested approval of an up to $20 million revolving debtor-in-possession facility from Mirant North America LLC and Mirant Americas Energy Marketing LP, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Texas.

The debtors had historically received credit and capital support from affiliated entities, which are expected to emerge as reorganized entities under Mirant's plan of reorganization. However, the debtors, which are excluded from Mirant's plan of reorganization, did not have separate access to third-party capital and financing.

Accordingly, as debtors in possession, the excluded debtors said they will require cash and liquidity support for their ongoing operations.

DIP proceeds will be used for working capital and other general corporate purposes.

Interest will be Libor plus 225 basis points.

The commitment termination date will be the earliest of the stated maturity date of the DIP facility, the date of loan pre-payment, the effective date of a plan of reorganization or on event of default.

A hearing on the DIP is scheduled for Dec. 28.

According to the motion, some of the debtors - including Mirant Bowline, Mirant Lovett and Mirant New York - that own generating plants in New York were parties to tax proceedings challenging the assessed value of the generating plants determined by their respective local taxing authorities. The companies have challenged the local tax assessments for years.

As part of the plan of reorganization, the debtors proposed a settlement with the New York Taxing Authorities that would resolve the dispute over the property taxes and have now established the framework for an agreement with the taxing authorities.

However, the agreement is subject to various internal Mirant Corp. approvals, governmental approvals and approval by the New York Supreme Court, and the approvals for the settlement agreement were not obtained before the Dec. 1 plan confirmation hearing. As a result, the plan confirmation hearing for the excluded debtors was continued.

Mirant, an Atlanta-based power company, filed for bankruptcy July 14, 2003. Its Chapter 11 case number is 03-46590.

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